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Strategies & Market Trends : Waiting for the big Kahuna
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To: GROUND ZERO™ who wrote (44193)10/24/1999 8:03:00 AM
From: Gary105  Read Replies (1) of 94695
 
My current thoughts follow:

1. No BK, but potential for correction to 8500 area. Why no BK? Because BKs have occured when market comes down quickly to 200 d MA bounces up a lot and then comes down hard below 200 d MA. The fact that market is ocillating around 200 d MA leads me to believe that there is balance and while there is further downside, it will not be BK.

2. AG, while believing markets are overvalued, would prefer to see slow decline rather than BK. There was interview with high level Japanese official saying that the US markets will probably see gradual decline.

3. Too much bearishness among advisers to see BK. In fact this could be contrary indicator. I think there is 30% chance we have already seen lows (based on a few successful tests of 200 d MA) but I still think there is 70% chance we go lower (gaps on Nikkei and internuts at lower levels)

4. Fundamentally, I think US economy slows while world economy grows, perfect soft landing in 2000 and that market rallies from its lows this year. I think a rally would be sustainable if market started rally from reasonable valuation level (say 8000 on dow, 1000 on s&p) - but I do not think these low levels will be attained.

5. Bottom line - we probably go lower but no BK cataclysmic event (I define BK as >20% loss in a matter of a few days) I think the catalyst will be the dollar approaching parity with the yen.

Gary
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